Northern Rock new CEO faces prospect of EGM

by Gill Montia

Story link: Northern Rock new CEO faces prospect of EGM

Northern Rock has secured approval from the Financial Services Authority for its appointment of Andy Kuipers as chief executive of the mortgage bank.

Mr Kuipers, who previously headed the bank’s sales and marketing operations, officially took up his post yesterday following on from Adam Applegarth who left the bank last week, earlier than expected.

In his new role, Mr Kuipers is immediately faced with the prospect of an Emergency General Meeting.

It is rumoured that Northern Rock’s leading shareholders, RAB Capital and SRM Global, the hedge fund managers, are likely to force the bank to call an emergency meeting in mid-January.

The bank’s management had been hoping to avoid such an event because it would give 140,000 stakeholders in the business a further opportunity to express their dissatisfaction at the way in which the sale process is being handled.

The length of time being taken to settle the fate of Northern Rock continues to cause damage to the brand and fuel speculation that it will eventually have to be nationalised, leaving shareholders with little or nothing.

While Virgin Group and the consortium headed by Olivant remain in the bidding, only yesterday Bradford & Bingley expressed interested in acquiring part of the bank’s mortgage book, should it be broken up.

Also yesterday, SRM Global raised its share in the bank to 9.74%, from 9.51%.

Earlier this month other leading shareholder, RAB Capital, issued a profits warning after its largest fund, the $2 billion Special Situations fund, lost 10% of its value in November.